Stimulus Details

STIMULUS DETAILS….In case you’re curious, Barack Obama’s economic boffins now estimate that his stimulus plan will create 3.6 million additional jobs over the next two years. And if you’re further curious about how likely this is to affect you, the estimated breakdown by industry is on the right:

To get more detailed information on the breakdown of the jobs created, we use a simulation from a prominent private forecaster on a plan that is similar — though not identical — to the type of plan the President-Elect is considering….The estimates suggest that 30% of the jobs created will be in construction and manufacturing, even though these industries employ only 15% of all workers. Both sectors have been particularly hard hit recently. The other two significant sectors that are disproportionately represented in job creation are retail trade and leisure and hospitality.

Later in the report the authors helpfully estimate that 42% of the new jobs will go to women. Bruce Bartlett emails a very brief critique of the report: “Some of these numbers look rather dubious to me, especially those for ‘indirect’ job creation.” Perhaps so, though the broad methodology seems within the ballpark of reasonableness: they assume a net multiplier (spending + tax cuts) of around 1.3 producing nominal GDP growth in 2010 of $500 billion, combined with a “conservative rule of thumb that a 1 percent increase in GDP corresponds to an increase in employment of approximately 1 million jobs.” Paul Krugman thinks these numbers sound roughly right and show that the stimulus package is too small. I’ll pass along other economic comment as I see it.